Jan 30

The Economics of Public/Private “Investment”

Don’t worry, it’s not long or complicated or even counter intuitive like some of my economic pieces are, it’s simply about lying and yes, both sides do it- wise up. I draw it to your attention because I find it a remarkably clear and concise summary.

Paul Waldman offers this in the context of tonight’s State of the Union and Trump’s Infrastructure initiative, but it’s true of every Neo Liberal Public/Private deal.

In normal circumstances, the government decides it needs a new bridge, so it hires Joe’s Construction to build it. But the bridge still belongs to the government; we just have to pay maintenance costs. In the kind of “partnership” the Trump administration wants more of, the government decides it needs a new bridge, so it gives PriveCo Equity Partners a gigantic tax incentive to build the bridge, which they now own — and will charge tolls on in perpetuity. Taxpayers could (should read almost always do) shell out nearly as much in tax incentives to the private company as we would have spent to just build the bridge, and then on top of that you’ll have to pay tolls to cross it — forever. As long as the bridge stands, people are paying extra so PriveCo Equity Partners can make a profit.

Some bargain.